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17:56
PDT

Japan's Finance Minister warns of action against FX speculation.

Japan Finance Minister Katayama Bank of Japan Himino U.S. dollar JGB CGP FX BOJ Mainland China Hong Kong The China PRIVATE USDCNH DXY

– Yen shows weakness against the U.S. dollar, nearing levels not seen since July 2024.

– Government will not use debt for food sales tax cuts.

– Bank of Japan's bond buying is not a current monetary policy tool.

– Fiscal concerns are pressuring the Japanese government bond market.

currency interventionfiscal policybond market dynamics

▸ Full transcript

Mission is targeting the launch of five-year CGP futures on August 3rd. It follows the expansion of onshore bond futures to qualified foreign institutional investors announced in April. And take a look at how the Japanese yen is trading at the moment. Of course, significant weakness, a little bit of strength perhaps against the U.S. dollar, but we're still talking about levels that we haven't seen since July of 2024. We're firmly on the intervention watch as we're now hearing from Finance Minister Katayama that Japan can take bold action against speculative FX moves. There's no change in the sense on currency. Of course, these are words that we have continued to hear from the government. We're now hearing from her as well that Japan won't rely on debt to fund food sales tax cuts. This is something that the government has said in the past as well, given those fiscal concerns have pressured the JGB space here in Japan. We also heard from the Bank of Japan deputy governor Himino about bond buying that it isn't necessarily the BOJ's monetary policy tool now. Of course, the Bank of Japan just high-grates this month, although the Japanese yen weakness has continued. We do have a few markets away today. Mainland China, Hong Kong, and Taiwan. That's it from the Asia trade. The China show is next. This is Bloomberg.

Analysis

Japan's Finance Minister Katayama indicated that the country is prepared to take bold action against speculative foreign exchange moves, as the yen shows signs of weakness against the U.S. dollar. Additionally, the government has reiterated that it will not rely on debt to fund food sales tax cuts, reflecting ongoing fiscal concerns impacting the Japanese government bond market.

Smart money should note that the Bank of Japan's recent stance on bond buying may signal a shift in monetary policy tools, especially as the yen continues to weaken. The government's commitment to fiscal discipline amidst currency volatility could lead to increased scrutiny of JGBs and potential intervention in FX markets.

17:51
PDT

Transitioning to AI requires substantial capital investment.

Alibaba Joe Marina Jung ASML Howard Lutnick Bank of America Finance Minister Katayama FIFA World Cup 2026 Huawei US AI ROI

– Large companies face unique challenges compared to startups.

– Investment strategies should focus on future market directions.

– ROI considerations are similar across different business models.

– Ambitious founders are adapting to these challenges.

AI investmentbusiness scalability

▸ Full transcript

I work with an American company, and as much as I love the US, I kind of feel like we do need to do something about that. And so that's why I do what I do. And that's fundamentally where I feel like the direction of travel is and where the most ambitious founders are building towards. And the role of investors. Joe, talk to me a little bit about, you know, if you become a scale of a very, very big company like Alibaba, then the challenges also differ. What do you see as the biggest difference in changing direction or actually getting things done at a larger scale compared to a small startup? Well, the difference going from a marketplace business, which is capital light, into AI. In AI, you have to deploy capital, and we become a heavy balance sheet company pretty quickly over the last few years. But I don't think there is a fundamental difference in the sense that in both types of businesses you have to make investments, and you're investing for the future. And you have to have a view of where the future is going to be. And if that view is very clear, then you can have a high degree of confidence on the ROI of that investment, whether it's investing in a capital-like, you know, software-type capital-like business, or you're investing into consumers and things like that versus capex investments. I think financially it's the same thing from an ROI standpoint.

Analysis

The discussion highlights the challenges faced by large companies like Alibaba in transitioning to AI, emphasizing the need for significant capital investment. Investors should note that despite the scale differences, the fundamental approach to ROI remains consistent across business types, whether capital-light or heavy.

17:47
PDT

ASML denies exporting EUV machines to China.

ASML Howard Lutnick China Huawei US Trump administration EUV USDCNH DXY

– US concerns over potential violations of semiconductor export controls.

– Chinese companies reportedly seeking workarounds for EUV machine access.

– Geopolitical tensions are reshaping global semiconductor supply chains.

– Investment in domestic semiconductor capabilities may increase.

geopolitical tensionssemiconductor supply chain

▸ Full transcript

Restrictions have been in place for several years now, dating back to the first Trump administration. That would be a major violation. Now, to be very, very clear, ASML has denied that it has, that any of this is going on. It's denied that there are EUV machines or even one EUV machine. It has denied that it has played any role in the export of even the kinds of tools that are needed to transport and to basically fine-tune EUV. So ASML is very clear in its statements to us and its statements to the US government. And to kind of put into context, the lack of access to these types of machines is really the biggest hurdle that China and China's companies are facing. Is that what we're hearing from the likes of Huawei or is there a workaround that they've been managing to find? I think if you talk to the chip experts and the chip manufacturers in China, they will tell you that they are finding ways around it, but there is no actual immediate and comparable substitute for these EUV machines. Remember, these go for hundreds of thousands of US dollars. They're the size of a school bus. They're incredibly, incredibly sophisticated and complicated. And it's not like you can just tear one down and replicate it immediately. It represents years and years of advanced fine-tuning on the part of ASML.

Analysis

ASML has denied allegations of exporting extreme ultraviolet (EUV) machines to China, which would violate US export controls. The lack of access to these sophisticated machines remains a significant hurdle for Chinese chip manufacturers, despite claims of finding workarounds.

Smart money should note that the geopolitical tensions surrounding semiconductor technology are intensifying, with the US tightening restrictions on exports to China. This could lead to increased investment in domestic semiconductor capabilities and alternative supply chains in the West, impacting global tech dynamics.

17:45
PDT

ASX 200 down 0.9% amid rising cost fees.

Finance Minister Katayama ASML US China Tom Giles Bloomberg FX ASX The Commerce Secretary Lutnik This Bloomberg ASX 200 USDCNH PRIVATE

– US concerns over ASML's potential export violations.

– Geopolitical tensions impacting semiconductor supply chains.

– Speculative FX moves under scrutiny by Japanese authorities.

– Rising costs may affect broader market sentiment.

geopolitical tensionssemiconductor export controlsFX market volatility

▸ Full transcript

Finance Minister Katayama speaks about taking bold action against speculative FX moves. You have the cost fee also rallying today, reaching record highs again and surpassing that 9000 level as the ASX 200 is one benchmark that's losing ground at the moment, down 0.9%. Continuing on that story, the US is now telling ASML its concerns that China may have top chip tools. The Commerce Secretary Lutnik expressed those concerns to ASML's senior leadership. This Bloomberg has learned is a key issue, especially given that it could be a big breach of Western semiconductor export controls.

Analysis

Finance Minister Katayama is taking bold action against speculative FX moves as the cost fee rallies, surpassing the 9000 level, while the ASX 200 benchmark loses ground by 0.9%. The US has expressed concerns to ASML regarding potential breaches of semiconductor export controls, highlighting the geopolitical tensions surrounding technology exports.

17:40
PDT

U.S. concerns over ASML's export practices highlight geopolitical tensions.

ASML Howard Lutnick U.S.China University of Technology, Sydney EUV Marina Jung Commerce Secretary Howard Lutnick USDCNH

– ASML denies allegations of shipping advanced technology to China.

– Potential for stricter regulations on semiconductor exports.

– Higher costs for critical minerals may impact green energy transition.

– Decoupling from China remains a long-term challenge for global supply chains.

geopolitical tensionssemiconductor exportscritical mineralsgreen energy transition

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Of commercially benefits for those companies. But what about the entire decarbonization course? That means, I mean, we consumers, the industry will pay more for the green energy transition because we have to pay more for more expensive critical minerals. So I'm not sure how we can balance these security requirements and decarbonization requirements in the future. Marina, really great to have you with us. Marina Jung is an associate professor at the University of Technology, Sydney. And staying on this issue, the sensitivities of geopolitics and where it meets technological dominance, we're hearing now that the U.S., via the Commerce Secretary Howard Lutnick, has expressed concerns to ASML, this is of course Europe's most valuable company, the senior leaders in that company that one of its top-of-the-line machines may have made its way into China, which would be an invalidation of U.S.-led export restrictions. ASML has pushed back on that, suggesting, explaining that none of its extreme ultraviolet lithography machines are in China. A company spokesperson is saying that they have never shipped an EUV machine to China, senior administration officials saying that evidence that ASML has not acted in good faith, such as exports to China of gear specifically related to EUV tools, which the company has.

Analysis

The U.S. has raised concerns with ASML regarding potential violations of export restrictions related to advanced semiconductor technology being shipped to China. ASML has denied these allegations, asserting that none of its extreme ultraviolet lithography machines have been exported to China, despite U.S. officials suggesting otherwise.

Smart money should note the increasing geopolitical tensions surrounding technology exports, particularly in the semiconductor sector, as this could lead to stricter regulations and impact global supply chains. The ongoing struggle between security and trade could result in higher costs for critical minerals, affecting the green energy transition and overall market dynamics.

17:37
PDT

Japan faces a critical shortage of heavy rare earth elements.

Japan Resonac China Linus US Europe CEO USDCNH

– Building a China-free supply chain will take longer than projected.

– Global supply chains are shifting to a security-first logic.

– Divergence among regions may impact semiconductor and material sectors.

– Investors should reassess exposure to companies reliant on Chinese resources.

supply chain riskgeopolitical tensions

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Goods, despite the effort, for example, in investing in Linus and promising to buy off-take products from Linus, Malaysia, and so on, and stockpiling, and not forgetting about that. Japan is almost at the critical point of the shortage of heavy rare earth elements in recent months. So that is exactly the point that, I mean, to build a China-free supply chain will take longer than any projections on paper. Marina, talking about really the decoupling and the divergence among regions, I was speaking to the CEO of Resonac last night, and he was telling me how he does business in these blocks, whether it's manufacturing in China, selling in China, doing business in the US, in Europe. He saw the world in these three distinct regions. Is this the future for semiconductors, for materials, for artificial intelligence? And what's the implication of the next generation of tech given this really divergent regions? Well, I mean, that's a very good question. For global supply chains, I mean, we are having a very clear indication that we shift the logic from free trade now to a security-first logic. So that means...

Analysis

The ongoing decoupling from China is proving to be a longer and more complex process than anticipated, particularly in securing heavy rare earth elements. Japan's struggle to diversify its supply chain highlights the challenges faced by countries reliant on Chinese resources, emphasizing the need for a strategic shift in global supply chains.

The shift from free trade to a security-first approach is reshaping how businesses operate across regions, particularly in semiconductors and materials. This divergence could lead to increased costs and supply chain vulnerabilities, making it crucial for investors to reassess their exposure to companies dependent on Chinese supply chains.

17:34
PDT

China's export ban on sulfuric acid will impact fertilizer and mineral treatment industries.

China Japan copper lithium sulfuric acid Is Japan USDCNH

– Decoupling from China is a long-term challenge for countries like Japan.

– China's strategic control over resources is increasing.

– Historical context shows the difficulty of diversifying supply chains.

– Resource nationalism may disrupt global markets.

resource nationalismsupply chain risk

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This collective action will certainly accelerate their decoupling pace, but it's a very long battle. China has more and more realized its value, its control, is not just in mining and processing, and you can even trace it even further upstream. That is, for example, China has been using the not-so-glamorous element, sulfuric acid. China has recently announced it's on the list of export bans. So these will not only just have an impact on fertilizer production but also for mineral treatment because a lot of minerals, copper, lithium, and so on, all rely on sulfuric acid to treat before they can be used. So that's China's advantage. To your point on how long this decoupling takes, I worked in Tokyo back in 2010 when China banned critical minerals exports to Japan. Throughout the whole time, Japan has tried to diversify away from China. I come back here to Japan 15 years later and this is still the top story. Is Japan a reflection of how difficult it is to move away?

Analysis

China's recent export ban on sulfuric acid is poised to impact fertilizer production and mineral treatment, highlighting its strategic control over critical resources. This decoupling from global supply chains is a long-term challenge, as evidenced by Japan's ongoing struggle to diversify away from reliance on Chinese minerals since 2010.

Smart money should note that China's control over sulfuric acid not only affects immediate production but also signals a broader trend of resource nationalism that could disrupt global supply chains. The historical context of Japan's experience underscores the difficulty of shifting dependencies, suggesting that similar challenges may arise for other nations reliant on Chinese exports.

17:32
PDT

G7's declaration legitimizes industrial policy.

G7 China So China USDCNH

– China may retaliate against G7 measures.

– Implementation of supply chain resilience is far off.

– Potential for increased export restrictions from China.

– Market volatility may rise due to geopolitical tensions.

supply chain riskgeopolitical tensions

▸ Full transcript

There's no pathway to the implementation and how they can practically make this happen, though. Well, it is strategically very significant, but realistically, it's far away from reaching near-free China supply chain resilience in the short term. Is there any clarity on how that target can be met? Well, I mean, the value of this declaration is really it's legitimized the sort of industrial policy that has, until more recently, been taken as very much interventionist to be a legitimate tool used collectively by G7 and allies. So China will not take this very lightly and China can use it as an excuse that can retaliate again. What could you expect in terms of further use of export restrictions and the impact that would have on the broader market if Beijing were to retaliate or at least fire a warning shot? Well, I mean, it's quite clear from the declaration that the G7 has now realized the borderline of the...

Analysis

The G7's recent declaration legitimizes industrial policy as a collective tool, signaling a shift in approach towards supply chain resilience, particularly concerning China. However, the practical implementation of these strategies remains distant, and China may retaliate with export restrictions, impacting global markets.

Smart money should note that while the G7's stance may seem unified, the potential for Chinese retaliation could lead to increased volatility in supply chains and commodities, particularly if Beijing perceives these measures as a direct threat to its economic interests.

17:23
PDT

Goldman Sachs expects Persian Gulf oil exports to normalize by end of July.

Goldman Sachs Brent WTI OPEC Plus China US Persian Gulf Strait of Hormuz OPEC Stephen Szebchinski Asia Energy CL=F WTI PRIVATE GC=F

– Brent crude prices are currently below $80, indicating potential market mispricing.

– US oil production and exports are increasing, contributing to supply pressures.

– Chinese demand for oil remains weaker than expected, impacting market dynamics.

– Further downside for Brent and WTI prices is possible if demand does not improve.

oil market dynamicssupply and demandgeopolitical risks

▸ Full transcript

Goldman Sachs now saying that Persian Gulf exports should normalize by the end of July instead of their initial call of the end of August. If that's the case, how much have markets actually priced all of this in with Brent now below $80? I think oil probably still has some way to go if you want to truly price in the Strait of Hormuz opening fully and for trade from that region stabilizing. I think the most important thing, that being that we are supposed to be in a glut year. Before the war began, there was talk of an oversupply for oil. US oil exports and production had been ramping up. OPEC Plus have been adding barrels to the market. Chinese demand has been weaker than a lot of people expected. And even over the last few months, Chinese imports have really crashed. If that stays up, rather if Chinese demand stays lower, you see the normalization of trade. You have the US continuing to at least produce and export to some degree, then you will have a frothier market and you could see more downside for both Brent and WTI, the two main oil benchmarks. Stephen Szebchinski there who leads our Asia Energy coverage. And we do have an alert on the Bloomberg. The US has started a section 301 probe of Germany over pharmaceutical products. Now we have of course seen a section 301 investigation that could eventually lead to tariffs. A U.S.C.R. now saying that the investigation of Germany is under.

Analysis

Goldman Sachs has revised its forecast for Persian Gulf oil exports, now expecting normalization by the end of July, which could indicate a more stable oil market sooner than anticipated. However, with Brent crude prices below $80, the market may not fully reflect the implications of the Strait of Hormuz reopening and the potential for increased supply amidst weaker Chinese demand.

The expectation of a glut year for oil remains, as US production and exports continue to rise while OPEC Plus adds barrels to the market. If Chinese demand does not recover, the normalization of trade could lead to further downside pressure on both Brent and WTI prices, suggesting that investors should remain cautious about the oil market's trajectory.

17:20
PDT

Iran is opening the Strait of Hormuz for oil exports.

Iran Saudi Arabia UAE Stephen Sopcinski AIS Asia Energy Persian Gulf Saudi Arabian CL=F

– Tankers previously stuck are now exiting, indicating increased supply.

– The sustainability of this supply wave depends on the return of empty vessels.

– Iran's ability to maintain production levels is crucial for market dynamics.

– The geopolitical landscape remains tense, impacting oil supply.

geopolitical riskoil supply dynamics

▸ Full transcript

Forecast for oil markets, given what's happening around Iran, and the Strait of Hormuz moves, let's bring in Stephen Sopcinski, who leads our Asia Energy coverage. Stephen, Mike was just telling us how strategically, Iran has put itself in a good place; it could even ramp up oil production faster than others have expected. What are we seeing on the ground when it comes to really this flow of oil from the Gulf? Yeah, I mean we're seeing right now a bit of a wave of supplies. So there are a lot of tankers that have been stuck in the Persian Gulf for months. They've been loaded with oil, and you're starting to see some of those exit. Three super tankers that were Saudi Arabian owned have exited, and a UAE vessel has also left. We've also actually seen, as you mentioned, Iranian vessels also going through the Strait of Hormuz with their ship tracking on, with their AIS transponders on, which means that they're not trying to hide their location, further illustrating that the strait is indeed opening. Now, I think the big key thing to watch is how many empty ships return, because what I'm talking about here is a wave of supply that has already been essentially waiting to get out. Now, the big thing is, will they be able to sustain this? Because once these ships empty out, you need the ships that are no longer holding any oil or gas, the laden vessels, or rather the blast vessels, to come in and then pick up the oil or other products. And if Iran is able to really...

Analysis

Iran's strategic positioning allows it to potentially ramp up oil production, with tankers finally exiting the Persian Gulf after months of delays. The key indicator to watch is the return of empty ships, which will determine if this supply wave can be sustained.

17:18
PDT

Iran may impose service charges on vessels in the Strait of Hormuz.

Iran President Trump Jenny Vance The Axios CL=F

– President Trump emphasizes military success but acknowledges economic pressures.

– Potential for oil supply disruptions could impact global markets.

– Geopolitical tensions remain high, affecting investor sentiment.

– Market volatility may increase with any escalation in the region.

geopolitical riskoil supply dynamics

▸ Full transcript

Iran can shut the straits any time it wants. We've now seen that. The likelihood seems to be, and there have been Iranian figures quoted as saying this, that they'll impose some sort of service charges on boats going through, on vessels going through to make some money out of it. I'm not sure there's a lot that can be done about that unless we want to go back to conflict or something. The U.S. has sort of made it clear now that the bigger picture is the nuclear issue: ensuring Iran doesn't have a nuclear weapon and that its enriched uranium is removed. Jenny Vance went on to say that the main issue is that the strait is open, which is good for the world economy. But yes, as you say, there's still a lot to go on. The Axios show interview with President Trump was really interesting, right? He refuted this idea that this whole process has shown the limitations of his own power. He's insisting that this is probably going to be unconditional surrender from that they had defeated them completely militarily. At the same time though, he acknowledged the economic pressures in terms of not being able to get oil supply and such. Though we always see this part of the president where his ability to kind of turn one thing into what he sees as reality is quite remarkable. It is extraordinary, isn't it? We had that yesterday or the day before where he suddenly was switching to talking economics and depression and that sort of thing. And how significant it was that this had been avoided even though he was the one who had brought it on in the first place. So look, he is a master communicator. There's no question about that. There's quite a lot of funny stuff.

Analysis

Iran's potential to impose service charges on vessels passing through the Strait of Hormuz raises concerns about future oil supply disruptions. President Trump's comments highlight the tension between military success and economic pressures, particularly regarding oil availability.

Smart money should note the implications of Iran's actions on global oil prices and the geopolitical landscape, as any escalation could lead to significant market volatility. Additionally, Trump's framing of the situation suggests a strategic pivot that could influence investor sentiment and market positioning.

17:12
PDT

Samsung Electronics up over 7%; SK Hynix up nearly 6%.

Askelund Capital Samsung Electronics SK Hynix Apple Intel BHP BMO Capital Market Pultash project CIO AI SK BMO AAPL DXY

– Apple's collaboration with Intel may boost chip suppliers.

– BHP's Pultash project costs have significantly increased.

– Investor expectations are becoming unanchored from reality.

– Continued focus on the tech sector's broadening AI trade.

tech sector growthcost overrunsAI tradesemiconductor collaboration

▸ Full transcript

CIO of Askelund Capital. We continue to watch the tech sector across Asia. Of course, we have seen that big upside in the overnight session with the AI trade just broadening out. It's not just about semiconductors; it's networking, storage, power, infrastructure. And we're seeing the broad upside in the Asian session as well, with Samsung Electronics gaining more than 7%. But it's really about the Samsung Electronics chips trade, the SK Hynix chips trade of almost 6% right there. We had also heard overnight that President Trump said Apple would work with Intel to design and manufacture chips domestically, so do watch out for those Apple suppliers, Intel suppliers as well. Yeah, check in on BHP, what we're watching here in Australia with that $2.3 billion dollar Pultash project charge, costs again being outrun, and this has sort of been a continuing theme when it comes to the routine series of cost and time overruns for the expansion of this project in Canada. This has blown past cost estimates many times. Now the following, the latest review, I should say that phase two expansion will now cost $6.9 billion. The earlier forecast was $4.9 billion, with production to start at the end of 2031. We're seeing quite a bit of downside there as these investor expectations continue to become unanchored from the reality. Those initial expectations were between one and one and a half billion for the upwards revision. Really what we're seeing is beyond that and the likes of BMO Capital Market saying that that...

Analysis

The tech sector across Asia is experiencing significant gains, with Samsung Electronics and SK Hynix both seeing substantial increases in their stock prices. President Trump's announcement regarding Apple's collaboration with Intel on domestic chip manufacturing is expected to impact suppliers positively, particularly in the semiconductor space.

Despite the positive momentum in tech, BHP is facing challenges with its Pultash project, which has seen costs balloon to $6.9 billion from an initial estimate of $4.9 billion. This discrepancy highlights a broader issue of investor expectations being misaligned with project realities, suggesting potential volatility in related stocks.

17:10
PDT

Equity markets are adjusting to a shift in long-term fair value.

Isaac RBA Australia

– Sticky inflation is impacting economic growth negatively.

– Cyclical risks may not be fully priced into current valuations.

– Expectations for RBA easing are increasing.

– Opportunities may arise in Australian bonds.

monetary policyequity market risksAustralian bonds

▸ Full transcript

But I would argue that that's been largely priced in well and truly to the equity markets from here. But it's an important shift that it does push up the longer-term fair value and perhaps help the valuations that we see be a little bit more justified over the long run. It's the cyclical side that I worry about and really the lateness of moving policy higher, just as inflation is sticky and hurting the economy. And I think the broader economic story is likely to slow down. So structurally, yes, some really great changes that we've seen not just over the last few years, but the last decade. Cyclically, I think this is probably not being priced in some of the downside risks. Isaac, we talked about opportunities looking interesting for treasury. Are they more interesting at this point when it comes to Australian bonds, particularly since we've seen that sort of repricing since the May 5th pause, right? Do you have expectations that they'll have to be easing to come perhaps in the next couple of years? And does that create the opportunity? It does. I think that they'll be easing potentially at the back end of this year or early next year that the underlying economy in Australia is facing some challenges. And so the RBA, while it's talkish, I think they are closer to cuts than they are to material hikes.

Analysis

The equity markets are adjusting to a shift in long-term fair value, potentially justifying current valuations despite sticky inflation and a slowing economy. Smart money should note that while structural changes are positive, cyclical risks may not be fully priced in, indicating potential downside ahead.

Expectations for easing in Australian bonds are rising, with the RBA possibly closer to cuts than hikes due to economic challenges. This could create opportunities for investors as the market adjusts to a more dovish stance from the central bank.

17:07
PDT

Bank of Japan's rate hikes may be too late and insufficient.

Bank of Japan Yosemite Himino Japan The Bank

– Inflation pressures could challenge Japan's economic recovery.

– Further rate increases may negatively impact equity markets.

– The deputy governor's comments indicate a cautious approach to currency management.

– Market expectations may be misaligned with the Bank of Japan's actions.

central bank policyinflation riskcurrency management

▸ Full transcript

100% the Bank of Japan doing its own thing is a good way of putting it. It's always done its own thing and I would say historically has done that poorly. It tends to be late to the party. It tends to wait too long to hike, and we saw the impact of having rates at a very low level for many decades. The Bank of Japan should have been hiking last year faster. Now it's hiked once just, I think, as inflation is impacting it and growth is likely to slow. Further hikes, I think, will be particularly painful for Japan's economy, and I think it does call a little bit into question the durability of the rally that you're seeing in equity markets. Despite the attempts to hike rates to shore up the currency, I think that will be a challenge for them. So we're not particularly positive on Japan at the moment; I think it's going to face challenges. The Bank of Japan, if it hikes again, will likely cause a lot of pain in its own economy. In fact, the deputy governor of the Bank of Japan, Yosemite Himino, speaking right now in parliament, is saying that they need to watch the impact of currency on the economy. They expect the price trend to rise gradually, and that there's a risk for a price trend to rise above the 2 percent target and to keep raising rates in response to the economy and also to the price trend.

Analysis

The Bank of Japan's delayed rate hikes are raising concerns about the sustainability of Japan's equity market rally, as inflation pressures mount. The deputy governor emphasized the need to monitor currency impacts on the economy, suggesting that further rate increases could inflict significant pain on Japan's economic landscape.

Smart money should note that the Bank of Japan's historical hesitance to act decisively may lead to a misalignment with market expectations, potentially destabilizing investor confidence. The anticipated rise in prices above the 2% target could force the central bank's hand, complicating the economic recovery and impacting global markets.

17:03
PDT

Brent crude oil prices down 1%.

Brent crude BHP Janssen potash project PGM Fed WTI CEO Askelund Capital FEDFUNDS WTI CL=F

– BHP's Janssen potash project costs rise to $6.9 billion.

– Market awaits developments on Strait of Hormuz tolls.

– PGM forecasts further yield curve flattening.

– Potential Fed actions could impact inflation expectations.

oil market volatilityinflationary pressuresyield curve trends

▸ Full transcript

Parts of the mass who had expected perhaps a more politically pliant or dovish central bank under his watch, which we haven't sort of gotten that so far anyway. So there is his expectation that shorter data treasuries have more room to adjust. Longer maturity still could see more benefit if we see tougher inflation starts from the Fed. So that's the sort of contention that we're seeing here. We're seeing PGM forecasting further flattening of the yield curve as well. Doesn't actually even rule out an inversion there. If you take a look at what we're watching with oil markets, as I said, not a great deal of big movement. Brent crude coming online, we're seeing off by about 1%. Still about a 9% decline if you zoom out to the weekly look for WTI. So at the moment a little bit of a holding pattern as we wait to see, as Sherry mentioned, some of those implementation risks. What happens if we are faced with that reality that perhaps Iran will charge tolls or surcharges of some kind for vessels passing through to the now reopened Strait of Hormuz? Here in Australia we're seeing downside of 1%, watching BHP as a heavy weight, likely to come under some pressure with another cost upgrade when it comes to the controversial Janssen potash project, higher than expected, $6.9 billion and that $2.3 billion charge there in play as well. Aussie shares broadly, we did see that four-day rally, so a little bit of a pullback now. Let's get some more market analysis with Isaac, who is the CEO of Askelund Capital. Isaac, really great to have you with us. So, obviously a lot of cross-countries.

Analysis

Brent crude oil prices are down by about 1%, reflecting a broader holding pattern in the market as traders await developments regarding potential tolls or surcharges in the Strait of Hormuz. Meanwhile, BHP faces pressure from a significant cost upgrade related to its controversial Janssen potash project, now estimated at $6.9 billion, which could impact investor sentiment towards Australian shares.

The flattening yield curve forecast by PGM suggests potential market volatility, especially if inflation pressures prompt a more aggressive stance from the Fed. Smart money should note the implications of rising costs in key projects like Janssen, which may signal broader inflationary trends affecting commodities and equities alike.

17:01
PDT

Japanese yen at weakest level since July 2024.

Japan Japanese yen Nikkei Tokyo Electron Ibidene Intel Apple South Korea Samsung SK Hynix Bank of Japan JGB FEDFUNDS AAPL CL=F

– Nikkei up 7.1%, nearing record high with seven consecutive gains.

– Downside pressure on JGBs continues amid Fed rate expectations.

– Intel's partnership with Apple could benefit Japanese and South Korean tech firms.

– Focus on tech stocks like Tokyo Electron and Ibidene.

Fed policyJapanese market dynamicstech sector growth

▸ Full transcript

Risks around the Iran truce. A look at how Japan is coming online because we had seen the repricing of energy stocks and the oil trade as well in the Japanese session. Today we're watching the repricing of the Fed rate hike. Risks at the Japanese yen continue to be under pressure. We're talking about levels that we haven't seen since July of 2024. So we're very much on intervention watch. The Nikkei opening higher by 7.1%. We had seen immense gains for the Japanese market. If we finish higher again today, it will mark seven sessions of consecutive gains and a record high, and we haven't seen this number of gains consecutively since August of last year. We're watching the JGB space as well, because we had downside pressure, of course, as I mentioned, the Fed rate repricing is still the major story here across Japan, as well as, of course, the tech story. So do watch out for names like Tokyo Electron and Ibidene. We heard from President Trump that Intel will be working with Apple to make chips domestically. So that would be a huge story, not only for the suppliers here in Japan but also across South Korea and that tech AI trade in the Kospi, of course, Samsung and SK Hynix are the ones.

Analysis

The Japanese yen is under pressure, reaching its weakest level since July 2024, as the market anticipates further Fed rate hikes. Meanwhile, the Nikkei is experiencing significant gains, with a potential record high if it finishes higher for the seventh consecutive session.

Smart money should note the ongoing downside pressure on Japanese Government Bonds (JGBs) amid the Fed's rate repricing, which could lead to shifts in investment flows. Additionally, the collaboration between Intel and Apple for domestic chip production may bolster the tech sector in Japan and South Korea, impacting key players like Tokyo Electron and Samsung.

16:58
PDT

Skepticism about the Fed's dovish approach is rising.

Federal Reserve Bramo Bloomberg Ed Ludlow AI San Francisco Bloomberg Tech Bloomberg Television FEDFUNDS PRIVATE

– Some analysts are turning bullish despite concerns.

– Market sentiment may be overly optimistic.

– Investors are being conditioned to expect continuous gains.

– Potential for a market correction exists if economic indicators weaken.

Fed policymarket sentiment

▸ Full transcript

That is ticking and flexing upward, given the fact that this Fed has been incredibly dovish. Are they going to wreck the party? I mean, ultimately, it's easy to be a skeptic, but I might as well join the party and not be so skeptical, because you're not paid to be skeptical. You're not paid to poke holes. You are paid to just go with the mob. And we got that breaking news whoosh that drives across the screen. Can we play that now? Sort of breaking news. It's the job. Come on. Bramo. No. Bramo, I think, going to look to confirm this, but I think Bram I've just turned bullish. Is that what just happened? I think that it just doesn't pay to be skeptical. You take a look at every single different benchmark. Okay. I mean, sort of, what are we training people? We are training them that you cannot lose and that seems to be the way to go. Bulls everywhere this morning getting very nervous following that. Don't miss Bloomberg surveillance live every weekday. Technology's embedded in every aspect of our lives and that revolution is playing out in real time. From finance to defense tech, AI to entertainment from the road to the stars. Bloomberg is bringing you the stories of companies and people that are pushing tech to new frontiers and the politics reshaping global tech markets. I'm Ed Ludlow live in San Francisco and this is Bloomberg Tech. Every weekday only on Bloomberg Television. Making money isn't about drowning in emotions. It's about understanding what's actually happening. are the best.

Analysis

Market sentiment is shifting as skepticism about the Federal Reserve's dovish stance grows, with some analysts turning bullish despite underlying concerns. The prevailing mood suggests that investors are being conditioned to expect gains, which could lead to complacency in the market.

Smart money should note the potential for a market correction if the Fed's policies do not align with investor expectations. The current bullish sentiment may mask underlying risks, particularly if economic indicators begin to falter.

16:52
PDT

Electric companies in China to raise prices post-July/August.

China electric companies Involving China After July USDCNH

– Strong demand is driving upward adjustments in forecasts.

– Increased production capacity in China reflects confidence in market growth.

– Investment decisions will hinge on ongoing demand trends.

– Air demand remains a key bright spot in the market.

demand growthelectricity pricingChina market dynamics

▸ Full transcript

Involving China and Taiwan? After July or August, all the electric companies will increase their price. When it comes to how your business position is from here, what are some of the bright spots then? Bright spot? Of course, the increasing demand for it is very strong. You feel it. Like, you know, the forecast is upward-adjusted every day, basically. So, air demand is very, very strong. When it comes to China, for example, you recently increased production capacity there. At what point do you make a decision on another round of investments? I think it depends on the demand in China. What we are...

Analysis

China's electric companies are set to increase prices after July or August, indicating strong demand in the sector. The upward adjustment in forecasts suggests a robust air demand, particularly as production capacity in China is being expanded based on this demand.

16:48
PDT

KPMG's brand is under scrutiny due to serious allegations.

KPMG Australian government Len Lies Adam Hay PRIVATE

– The firm has agreed to pause new bids until September.

– Ongoing investigations could lead to reputational damage.

– Parliamentary hearings are focused on accountability.

– Future revenue impacts are likely as trust erodes.

corporate governanceconsulting market dynamics

▸ Full transcript

Investigations continue into this matter. Have we seen an impact on the business? Yeah, I mean, obviously the initial kind of fallout has already played out relatively well, and KPMG came to an agreement earlier this week with the government to not bid for any new work, at least through to September. Clearly, it's impacting future revenues there, but it's more about the brand, isn't it? It's more about the sense of how this tarnishes the brand because, at this stage, nothing's been proven one way or another, and we're still at the stage of allegations. So it's a very, in many ways, early stage process here where the parliamentarians allow quite serious questioning around what's happened, but they need to get more on the public record, and that's really what today's all about. Finance editor Adam Hay there. We do have more ahead here to come on the Azure trade; this is Bloomberg. The robots are working in Canada. Commerce has completely transformed over the past couple of decades. With same-day groceries and next-day deliveries, consumer expectations for speed and convenience have completely shifted. Automation and robotics will have an important role to play in the future.

Analysis

KPMG has agreed to refrain from bidding for new work until September due to ongoing investigations into allegations of misusing confidential client information. This situation is tarnishing KPMG's brand, despite no proven wrongdoing at this stage.

The current scrutiny could lead to long-term reputational damage for KPMG, impacting client trust and future revenue streams. Investors should monitor how this situation unfolds, as it may influence KPMG's competitive positioning in the consulting market.

16:46
PDT

Australian government accused of dishonesty over housing policy changes.

Anthony Albanese KPMG Len Lies Australia Parliament Adam Hanks So Adam

– KPMG faces allegations of misusing confidential information.

– Parliamentary hearing could impact KPMG's reputation and client trust.

– Disconnect between government actions and public perception may affect future elections.

– Ethical practices in consulting firms are under increased scrutiny.

government accountabilityconsulting ethics

▸ Full transcript

referencing Anthony Albanese and the broken promises from the election campaign. Now the government's framing it differently; they are saying we came to a different view, but it's hard to escape this framing that they've been in some way dishonest and should have consulted first. In a situation where they're backpedaling, the government was making these changes to help get young people into homes, but on the other hand, they've ended up being accused of crushing the aspiration of that same demographic. Speaking with Australia and KPMG, Australia is set for a public reckoning. A hearing is currently underway this morning in Parliament over allegations of misusing confidential client information to win contracts from all its bring-of-units editor Adam Hanks. So Adam, give us a background as to what we're contending with here. Yeah, really everything that we're going to be hearing in Parliament today focuses on the allegations that were made public in March around what KPMG staff did with some investigation that they had into some whistleblower allegations. Now, it sent us on kind of Len Lies, who are a customer of KPMG and their audit division. The allegations are around whether that information that KPMG had made its way into other bid pictures for other companies and for other business. And really what the parliamentary hearing is trying to do today is trying to ask questions of both current and former staff at KPMG, but also.

Analysis

The Australian government faces backlash over perceived dishonesty regarding election promises, particularly in relation to housing policies aimed at young people. KPMG is under scrutiny in Parliament for allegations of misusing confidential client information to secure contracts, raising concerns about ethical practices within the firm.

The situation highlights a potential disconnect between government intentions and public perception, which could impact voter sentiment ahead of future elections. Additionally, KPMG's reputation is at stake, and any findings from the parliamentary hearing could influence client trust and future business opportunities in the consulting sector.

16:39
PDT

Iran's Supreme Leader is now directly involved in negotiations with the U.S.

Iran U.S.Israel IRGC Supreme Leader GCC UAE Saudi Arabia Qatar Oman J.D. Vance Trump

– Internal disunity within Iran's regime may complicate future talks.

– Potential for increased domestic repression in Iran as a response to conflict.

– U.S. interests may be undermined by a crackdown on political opposition.

– The geopolitical landscape in the Gulf may shift due to varying responses from GCC states.

geopolitical tensionsIran negotiationsdomestic repressionoil market dynamics

▸ Full transcript

The conflict has empowered hardliners rather than caused the type of destabilization that you might expect to see ahead of regime collapse. Both Israel and the U.S. are very clear, at least in the early stages, that they did want to see the Iranian regime collapse. One of the challenges when you take a country to war like this, and it survives, is that the regime is then very incentivized to crack down in a very violent and repressive way on domestic political opponents, using the excuse of the conflict to do that. I'm very concerned that that's what we might see in Iran in the coming months: a crackdown on domestic opposition, which is the exact opposite of what U.S. interests in this conflict would be. How big of a shift was it that Iran's Supreme Leader accepted direct talks with Washington, and does this give us any indication of how the negotiations could go from here? There is, of course, this new disunity that's been created within the Iranian regime, between not just the traditional hardliner and reformist camps, but also between those who are more connected to the IRGC and have been directing the military response to this conflict, and those who lead the civilian political apparatus, including those who are directly involved in the negotiations. So, to see the Supreme Leader more directly involved suggests that they are attempting to bridge that disunity and ensure that everyone's on the same page.

Analysis

Iran's Supreme Leader's acceptance of direct talks with Washington indicates a significant shift in the regime's approach, potentially bridging internal disunity. However, this may lead to a crackdown on domestic opposition, countering U.S. interests in promoting stability and reform within Iran.

The emerging disunity within the Iranian regime, particularly between hardliners and reformists, suggests that negotiations may be more complex than anticipated. Smart money should consider the implications of a repressive domestic environment on Iran's international relations and economic stability.

16:37
PDT

U.S. lacks a clear strategy for the Strait of Hormuz.

Trump UAE Saudi Arabia Qatar Oman GCC Iran Strait of Hormuz Central Asia

– GCC states are divided on how to respond to the conflict.

– UAE advocates for a more aggressive U.S. response.

– Negotiations are ongoing but may not lead to lasting peace.

– Potential for increased volatility in oil markets.

geopolitical riskoil supply dynamics

▸ Full transcript

Putting aside Central Asia's sort of land routes, they were always in this position to be able to hold the strait for longer than the U.S. was going to be able to tolerate the strait being closed. So the fact that Trump, in a number of comments, admitted that they didn't have a plan or that they didn't have a strategy for dealing with the closure of the Strait of Hormuz is a major strategic error, I would say. The interesting thing that's happened with the GCC states in particular has been some disunity within them around how to respond to this conflict. The UAE, for example, has been hit with some of the largest drone and missile barrages during this conflict, and they have wanted and have pushed for a more aggressive response from both the U.S. and from international partners to sort of retake and reseize the Strait of Hormuz, whereas states like Saudi Arabia, Qatar, and Oman and others have been looking for a negotiated end to the conflict. So you're starting to see that negotiation, particularly through the Qataris and Omanis as well, bear some fruit with this ceasefire deal. But we should expect to see some disunity amongst the Gulf states in the next couple of years out of this conflict. What happens from the Iranian side? Obviously, there's been damage, particularly when it comes to the upper echelons of its leadership. Does this take us actually further away from the prospect of regime change and of Iran becoming a more responsible international player, particularly if...

Analysis

The geopolitical tensions surrounding the Strait of Hormuz have highlighted a strategic miscalculation by the U.S., as President Trump acknowledged a lack of a coherent plan to address the closure. Disunity among Gulf Cooperation Council (GCC) states is emerging, with differing approaches to the conflict, particularly between the UAE's push for aggression and other states favoring negotiation.

Smart money should note the potential for prolonged instability in the region, which could impact oil supply dynamics and lead to volatility in energy markets. The ongoing negotiations may not yield a durable resolution, suggesting that investors should remain cautious about the geopolitical risks associated with Middle Eastern oil supplies.

16:35
PDT

U.S. strategic petroleum reserves are declining rapidly.

Trump J.D. Vance Iran U.S.Axios MAGA Republican Party President Trump

– Trump is balancing domestic political pressures with international negotiations.

– The durability of the ceasefire deal is uncertain.

– Internal factionalism within the Republican Party may affect foreign policy.

– Global economic concerns are influencing U.S. responses.

geopolitical riskenergy market volatility

▸ Full transcript

That this was something he felt was necessary to deal with the fact that our strategic petroleum reserves have been declining at a very rapid pace and that when they do hit a sort of minimum operating floor, for example, that's a serious issue for the global economy. And so he was trying to avert that. And the Iranians, of course, they know that the U.S. is always going to be more responsive due to its power as the largest economy in the world and sort of the world's superpower; it's going to be more responsive to the concerns of the global economy, whereas Iran could withhold a little bit longer. Trump, of course, is also a democratically elected president, and he's looking down the line at midterms, and he's looking at the impacts on the Republican Party and his personal popularity. And then there's internal factionalism within the MAGA movement, between himself and potentially J.D. Vance, around this conflict. So for various reasons, largely to do with the fact that the U.S. is a democracy, they were more likely to be under pressure to end this conflict, even if this deal is not particularly durable, and you've raised Lebanon and the nuclear issue as two issues that could still yet see this ceasefire deal collapse. It's interesting we heard from President Trump speaking to Axios earlier, saying, refuting the idea that these negotiations, the way that the war has been carried out, has kind of shown him the limitations of his power, right? He is getting a lot of pressure domestically. How much pressure do you think he's also getting from allies particularly?

Analysis

The U.S. is under pressure to address declining strategic petroleum reserves, which could impact the global economy. President Trump faces domestic pressure regarding the ongoing conflict, balancing his political future with international relations.

Smart money should note the potential fragility of the ceasefire deal, as internal U.S. political dynamics and external pressures from allies could influence its durability. The interplay between U.S. domestic politics and international negotiations may create volatility in energy markets.

16:32
PDT

Japan's CPI growth matches expectations.

Japan US Iran Bank of Japan J.D. Vance CPI Persian Gulf Jesse Moritz Islamic Studies Vice President CL=F

– Core CPI shows slight deceleration.

– US-Iran agreement may increase oil supply.

– Wage growth in Japan remains a key focus.

– Energy subsidy rollbacks impact inflation.

inflation trendsoil supply dynamics

▸ Full transcript

Getting the national CPI year-on-year growth of 1.5 percent coming in line with expectations, a slight acceleration from the previous month. When it comes to the core CPI number, excluding fresh food, you get gains of 1.4 percent in line with expectations. Now, exclude energy as well, and you get core core CPI and its growth of 1.8 percent, a slight deceleration from the previous month. Of course, we were expecting a little bit more upside when it came to broad inflation numbers given that we have seen the rollback of energy subsidies here in Japan, also higher fresh food prices. We continue to watch, of course, wage growth, especially in real terms in Japan, for what could prompt the Bank of Japan to continue normalizing policy and high grades. Now, inflation, of course, potentially could ease with this agreement that we have now between the US and Iran. An impending wave of oil is said to be unleashed on Asia around 31 supertankers that were stuck inside the Persian Gulf are now set to sail out as the waterway opens up. Let's bring in Jesse Moritz, a senior lecturer in political economy at the A&U Center for Arab and Islamic Studies. Jesse, really good to have you with us. Of course, we heard from Vice President J.D. Vance not necessarily being very clear about what happens to these tools around the Strait of Hormuz.

Analysis

Japan's national CPI year-on-year growth came in at 1.5%, aligning with expectations, while core CPI showed a slight deceleration at 1.8%. The potential easing of inflation could be influenced by the recent US-Iran agreement, which may lead to increased oil supply in Asia.

16:30
PDT

Reopening of the Strait of Hormuz could boost oil market sentiment.

US-Essential Command Iran Strait of Hormuz oil US Premieres June Joe Matthews White House Essential Command PRIVATE CL=F

– Oil prices have seen significant weekly losses.

– Thin market volumes expected due to holidays may increase volatility.

– US-Essential Command has lifted the blockade on traffic.

– Ongoing concerns over US-Iran relations persist.

geopolitical riskenergy market dynamics

▸ Full transcript

Africa, a region rife with potential for growth and opportunities, but not without its challenges. Join us as we get to the heart of African business, politics, and economics. And ask the question, what's next? On this episode, Ebola can be a risk for all of us. The solution is not to close borders. The solution is to provide sufficient support. Premieres June 26th only on Bloomberg. Bringing you up to the minute political news whenever and wherever it happens. I'm Joe Matthews on the South lawn of the White House. This is Bloomberg. Take a look at what we're watching when it comes this Friday fray for Asia, of course, a bit quieter with some of those holiday thin market volumes to be expected. But still a couple of key themes in focus one, of course, will continue to be energy and oil, despite some of the longer term or medium term concerns over the US-Iran interim deal and the reopening of the Strait of Hormuz. We are seeing at the moment this reopening expected to really spark some optimism there. We have seen when it comes to the deep weekly loss for oil prices, that's the one to focus on, given that we have had the US-Essential Command lifting the blockade on traffic with the naval blockade as well, in terms of not seeing much of a move at the moment for the week.

Analysis

The reopening of the Strait of Hormuz is expected to spark optimism in the energy sector, despite ongoing concerns regarding the US-Iran interim deal. Oil prices have experienced a deep weekly loss, highlighting the volatility in the market as the US-Essential Command lifts the blockade on traffic.

Smart money should note that the thin market volumes due to holidays may amplify price movements, particularly in energy commodities. The geopolitical dynamics surrounding oil supply routes remain a critical factor influencing market sentiment and pricing.

16:26
PDT

U.S. senators are pushing for action on China's currency practices.

Scott Besant Elizabeth Warren Rick Scott China Hong Kong Securities and Futures Commission U.S. Treasury Japanese yen U.S. dollar CGP Treasury Secretary Scott Besant The Securities FEDFUNDS USDCNH DXY

– Hong Kong's new bond futures aim to boost yuan's global standing.

– Offshore yuan shows resilience against the U.S. dollar.

– Japanese yen weakness signals ongoing currency market challenges.

– Capital inflows into China may indicate investor confidence.

currency manipulationglobal investment trendscapital inflowsexchange rate policy

▸ Full transcript

A bipartisan duo of senators has called on U.S. Treasury Secretary Scott Besant to pressure China into addressing its exchange rate practices. Elizabeth Warren and Rick Scott told Besant in a letter that the yuan is undervalued relative to economic fundamentals. They also called for labeling China an exchange rate manipulator in the Treasury's next foreign exchange report. Hong Kong is set to launch China government bond futures as Beijing seeks to promote global yuan usage and attract foreign capital. The Securities and Futures Commission is targeting the launch of five-year CGP futures on August 3rd. It follows the expansion of onshore bond futures to qualified foreign institutional investors announced in April. Looking at how currencies are trading, the Chinese market closed today, and we also have some other markets away on holidays, including Taiwan and Hong Kong. However, take a look at the offshore yuan, as we continue to see that outperformance against the U.S. dollar, despite the Fed repricing at the moment that has sent the U.S. dollar higher, marking the biggest two-day rally we haven't seen in about three months. There is a difference with these capital inflows that we're seeing into the Chinese market when it comes to currencies. The Japanese yen, for example, has now passed the 161 level, indicating weakness that we haven't seen since 2020.

Analysis

A bipartisan group of U.S. senators is urging Treasury Secretary Scott Besant to address China's undervalued yuan, suggesting it manipulates exchange rates. Meanwhile, Hong Kong is set to launch five-year China government bond futures to enhance global yuan usage and attract foreign investment.

Despite the Fed's recent actions leading to a stronger U.S. dollar, the offshore yuan is outperforming it, indicating strong capital inflows into the Chinese market. Additionally, the Japanese yen has weakened significantly, surpassing the 161 level, reflecting broader currency market pressures.

16:22
PDT

SpaceX's IPO was among the top five busiest trading days for Charles Schwab.

SpaceX Charles Schwab Forge Anthropic OpenAI IPO FEDFUNDS

– Retail investors showed strong interest in innovative technologies during the IPO.

– The trend of value creation before IPOs is becoming more pronounced.

– Companies like Forge are enabling investments in pre-IPO firms.

– Future mega IPOs may see increased retail participation.

retail investor engagementpre-IPO investmentemerging technologies

▸ Full transcript

The history of the firm is impressive. If you think about all the market events we've had over those 50 years, for the IPO to crack the top five is pretty unbelievable. We had 140,000 clients calling live, and we had lots of digital engagement. It was impressive to see, and our teams were fully staffed, ready and able to handle our clients' needs that day. It was wonderful to see the teamwork and the effort that went into making this a success on our side. How do you think this is going to establish potentially what's next when it comes to other mega IPOs like Anthropic and OpenAI? Hopefully, it establishes retail having a really strong presence at the table. I think it's wonderful for the retail investor to be able to participate in something like this. So I hope this IPO establishes that. I think it also establishes an incredible level of interest among our client base for new and innovative technologies and being able to participate in them. We recently closed a deal with Forge, which allows our clients to invest in pre-IPO companies. I think that the interest around these new ideas and emerging companies is quite high and will only continue. Charles, Rick, the point that you just made is actually really important given the fact that people note that increasingly the value is being created before the IPO when companies are still private. Do you think that some of these IPOs will expedite the effort?

Analysis

SpaceX's IPO has generated significant retail investor interest, marking one of the busiest trading days in Charles Schwab's history. This enthusiasm reflects a growing trend where value creation increasingly occurs before companies go public, highlighting the importance of retail participation in future mega IPOs.

The strong retail engagement during SpaceX's IPO suggests a shift in market dynamics, where innovative technologies are capturing investor attention earlier in their lifecycle. This trend may lead to a more robust market for pre-IPO investments, as firms like Forge facilitate access to emerging companies, potentially reshaping investment strategies.

16:20
PDT

SpaceX's projected spending exceeds $1 trillion by decade's end.

SpaceX Charles Schwab Nasdaq 100 AI IPO US CEO Epic Fundraising Campaign Union Pacific Infrastructure Project Rick Worcester DXY

– Stock price rose 37% post-IPO, closing at $2.4 trillion market cap.

– Eligibility for Nasdaq 100 index may drive passive investment demand.

– Retail investor interest is high in AI and space innovation.

– Charles Schwab reports one of the busiest trading days in history due to SpaceX.

AI investmentspace sector growth

▸ Full transcript

There is a sense that the Epic Fundraising Campaign for this company has just begun. He sort of made a lot of historical comparisons to the Union Pacific Infrastructure Project in California and how that was sort of thought upon as crazy at the time, but obviously proved people wrong. But if you take a look at modeling and what economists and financial analysts are expecting from SpaceX, they're saying that the company will spend more than a trillion dollars by the end of the decade, the bulk of that focused on the AI operations and getting data centers to space. If you take a look at the share price, so we have seen a little bit of too and fro perhaps understandably given how fast it had run up as well, ending the first week of trading 37% higher above that $135 price of this record IPO, despite, as you mentioned, Sherry, that two-day decline. So total market cap at close $2.4 trillion US dollars, still making it the sixth largest company in the world, and also a point on eligibility for Nasdaq 100 index as well, 15 days of trading later, that could put more upward pressure on the share price because we'll start to see the demand coming through from passive investors as well. Well, Charles Schwab CEO Rick Worcester says SpaceX's stock market debut was one of the five busiest trading days in his company's 55-year history. He told us exclusively that retail investors have been drawn in because they can see and feel the innovation that the US tech sector is delivering. So you're seeing tremendous interest in AI related names and the space names. I think it comes...

Analysis

SpaceX's fundraising campaign is gaining momentum, with projections indicating the company could spend over a trillion dollars by the end of the decade, primarily on AI operations and space data centers. The stock has seen a significant rise, closing 37% higher after its IPO, with a market cap of $2.4 trillion, making it the sixth largest company globally, which could lead to increased demand from passive investors as it becomes eligible for the Nasdaq 100 index.

Smart money should note the strong retail interest in AI and space-related stocks, as highlighted by Charles Schwab's CEO, indicating a shift in investor sentiment towards innovation in these sectors. The potential for upward pressure on SpaceX's share price from index eligibility could create a favorable environment for further investment in the tech and space industries.

16:18
PDT

Oil volatility has dropped below 40, half that of the Cosby index.

Oil Cosby index Strait of Hormuz Iran US China SpaceX Bloomberg Bank of America EY Parthenon FIFA World Cup DXY

– SpaceX is preparing a bond offering potentially over $20 billion.

– Concerns remain about tolls in the Strait of Hormuz post-Iran negotiations.

– China's demand for oil is declining due to a shift towards electric vehicles.

– Implementation risks in US-Iran negotiations could impact oil markets.

oil market stabilitygeopolitical riskliquidity managementelectric vehicle transition

▸ Full transcript

P.W.C. So you can. With a presence in over 35 countries, we're proud to serve a global community as the official bank of the FIFA World Cup 2026. What would you like the power to do? Bank of America. A fad to some. The future of money to others. We see cryptos trillion-dollar swings. While others follow the noise, we follow the money. What are we, Kite? Happy Friday. I mean, we saw that roller coaster ride among markets and even SpaceX having two sessions of declines. It's interesting because despite all of this excitement, we saw that pressure on the company. But it's a company that continues to give us headlines, right? We're now hearing that they're entering the credit market. Sources telling us the bankers are preparing investors' calls for a bond offering that could be at least $20 billion. The debt sale would refinance a temporary $20 billion bridge loan that much.

Analysis

Oil volatility has significantly decreased, now below the 40 handle, indicating reduced market concerns regarding oil prices. Meanwhile, SpaceX is preparing for a bond offering that could exceed $20 billion, aimed at refinancing a temporary bridge loan, despite recent market pressures on the company.

Traders may be overly optimistic about a quick normalization in oil markets, especially with ongoing geopolitical tensions and China's declining demand for oil as it transitions to electric vehicles. The bond sale by SpaceX reflects a strategic move to stabilize its financial position amidst market fluctuations, highlighting the importance of liquidity management in volatile environments.

16:11
PDT

Trump's framing of the deal may not align with internal GOP criticism.

Donald Trump Iran Obama Hormuz Republican Party United States

– Iran may have gained a stronger position in negotiations than previously thought.

– The deal's similarities to the Obama agreement could undermine its perceived success.

– Political dynamics within the Republican Party may affect future negotiations.

– Market reactions may be influenced by perceptions of the deal's strength.

US-Iran relationspolitical dynamicsenergy markets

▸ Full transcript

Really kind of being quite defensive and saying that he had not learned anything about limitations to his power when asked whether the sort of negotiation and the war process had sort of, I guess, humbled him in any way. Behind the scenes though, there's plenty of internal criticism of this deal as we've seen a lot of those earlier maximalist demands being watered down. Yeah, that's right now, Donald Trump has every incentive to sort of claim victory here. Some have said politically that this has been a superpower of his, that he can take any sort of situation, claim victory, and move on. Indeed, the president is trying very hard to plate this in the most positive light. I think that a lot of observers looking at this look at the final deal that he got; there's a lot of comparisons to, as I said, the Obama deal there in terms of what he got and what Obama got. A lot of it is somewhat the same. You could say that Iran, particularly discovering sort of what it can do vis-a-vis Hormuz, may have come out in a stronger position than it had been before. We've heard that there. And you gotta be looking at this as well, you know, from Trump's side. He's been the undisputed kingmaker of the Republican Party in the United States. But he is just hearing it from a lot of his allies on the right, thinking that he got, you know, in some sense played now. You know, there has been some, as I said before, there's a lot.

Analysis

Internal criticism of the recent US-Iran deal suggests that earlier demands have been significantly softened, raising questions about its effectiveness. Observers note that while Trump seeks to frame the agreement positively, comparisons to the Obama deal highlight potential weaknesses in the current negotiations.

16:09
PDT

US-Iran negotiations on oil normalization face tight timelines.

US Iran Obama administration Trump WASH China India FX CL=F USDCNH

– Traders may be overly optimistic about quick oil market recovery.

– Fed's focus on transitory inflation is stabilizing markets.

– China's demand for oil is decreasing due to electric vehicle transition.

– Potential for long-term shifts in energy demand impacting oil prices.

oil market normalizationtransitory inflationelectric vehicle transitionemerging market currencies

▸ Full transcript

Now, bear in mind these sorts of agreements that we're talking about between the US and Iran hinge on just hundreds of tiny little things and little details. The last deal between the US and Iran, the Obama administration deal that Trump pulled out of, took about two years to kind of get together. We're talking about doing this in two months. There is a lot to be getting on with. Anthony, I know that you don't necessarily like to talk about the Iran war having implications or at least big repercussions for the markets anymore, but I got to ask, when it comes to oil, are traders getting a little bit ahead of themselves? They seem to be pricing a quicker normalization here. There are another two moving parts aside from the situation in the region, and that is the fact that WASH is very committed to looking through transitory inflation. So the impact on the rates market and the FX market and the price of money from the pop in oil has started to be mitigated somewhat. He's sticking very much to that message and also getting ahead of the problem by signaling a short and sharp rate hike. So in terms of oil's ongoing impact into US inflation and markets, WASH has handled it from the US side of things. Now, closer to our shores, you have China's demand falling off a cliff because of this ongoing transition into electric vehicles. So in terms of Asia, and also India is following suit very.

Analysis

The ongoing negotiations between the US and Iran regarding oil normalization are facing significant challenges, with traders potentially overestimating the speed of recovery in oil markets. The Federal Reserve's commitment to managing transitory inflation is mitigating the impact of oil prices on US inflation and markets, while China's demand for oil is declining due to a shift towards electric vehicles.

Smart money should note that the Fed's proactive stance on rate hikes could lead to a more stable macro environment, despite the volatility in oil prices. Additionally, the transition in Asia towards electric vehicles may create long-term shifts in energy demand that could impact oil prices and related markets significantly.

16:07
PDT

Oil volatility is now below 40, half that of the Cosby index.

Iran U.S.GCC Oman Anthony JD Van Scurred Derek Ballbank JD Vice President Van Scurred CL=F PRIVATE

– Shipping is returning to the Strait of Hormuz after U.S. blockade.

– Concerns persist about potential tolls from Iran on vessels.

– Implementation risk of the peace deal is a key focus.

– Geopolitical dynamics may affect global shipping and oil supply.

oil volatilitygeopolitical riskshipping costs

▸ Full transcript

As a whole, oil volatility has to come down. And we've seen that happen materially. Oil volatility is back below the 40 handle, which to give you some context is half the volatility of the Cosby index. So in terms of market concerns, oil has really faded into the background. Anthony, do stick around because we want to take you to the other big story that we're watching today and shipping is now beginning to return to the Strait of Hormuz after the U.S. blockade. And then as part of an entering peace deal with Iran. But concerns remain about whether Tehran might eventually charge fees on vessels. Vice President JD Van Scurred questions potential tolls in the strait after the 60-day negotiating period. That's not about tolling; that's about ensuring that the straits are never used as a choke point for the global economy ever again. It's frankly not what the Iranians want. It's not what the Omanis want. It's not what the GCC wants either. So what we're going to do, of course, working with our allies in the region, is to ensure that that is reflected in the final deal, and if that's not reflected in the final deal, there's not going to be a final deal. Let's bring in Bloomberg senior editor Derek Ballbank, and of course, Anthony is still with us, but Derek let me start with you because the problem now is implementation risk and whether the risk of tolls being repackaged as something else, service charges.

Analysis

Oil volatility has significantly decreased, now below the 40 handle, indicating reduced market concerns surrounding oil prices. Meanwhile, shipping is resuming in the Strait of Hormuz following a U.S. blockade, but there are lingering worries about potential tolls on vessels from Iran as negotiations continue.

Smart money should note the implementation risks associated with the peace deal, particularly regarding how tolls might be framed in future agreements. The geopolitical dynamics in the region could impact global shipping costs and oil supply chains, making this a critical area for monitoring.

16:04
PDT

S&P 500 dispersion at record levels driven by tech stocks.

S&P 500 Marvel US dollar BBDXY Asian FX yen Korean won Indonesian Rupiah Indian Rupiah Fed US FX S&P 500 FEDFUNDS BBDXY PRIVATE DXY

– Retail investors show strong conviction in tech names.

– US dollar resurgence could pressure Asian currencies.

– Yen and Korean won trading weaker than intervention levels.

– Increased likelihood of Fed rate hike in July.

tech sector strengthcurrency pressureFed policy

▸ Full transcript

Semiconductors are keeping dispersion within the S&P 500 around record levels. This is important because it gives retail investors in the U.S. tremendous conviction to keep chasing these tech names higher. For example, Marvel has been pushed into the S&P 500 actually on that rebalance yesterday. Coming into Asia, it really does look like tech is the only thing that is offsetting the increased hawkishness out of the Fed. Now that's playing out in an interesting way across Asian markets where you see Australian and Chinese futures lag versus the strong tech leads in Japan and Korea. What's going on when it comes to currencies right now and the impact on EMs in particular in Asia? We're seeing this resurgence in the US dollar now, and that's playing out on a cross-asset basis. The chances of a hike in July actually moved up materially with extreme futures activity in the August contract. Now in the BBDXY, which is the Bloomberg Dollar Index, it's found a level and is looking to break out of a multi-year range. If that does happen, it will put significant pressure on Asian FX. You already see the yen trading materially weaker than so-called intervention levels. The Korean won has given up a lot of its intervention, and we come into genuinely emerging markets in the back end of our session, Indonesian Rupiah and Indian Rupiah. It will be very interesting to see how they trade. The Rupiah is coming.

Analysis

The S&P 500 is experiencing record levels of dispersion, primarily driven by tech stocks, which are attracting retail investors despite increased hawkishness from the Fed. The US dollar is showing signs of resurgence, which could pressure Asian currencies, particularly the yen and Korean won, as they trade weaker than intervention levels.

Smart money should note that the potential breakout of the Bloomberg Dollar Index from a multi-year range could have significant implications for emerging market currencies. The heightened likelihood of a Fed rate hike in July, indicated by futures activity, suggests that investors should closely monitor the impact on Asian FX and broader market dynamics.

15:59
PDT

Underinvestment in private markets is prevalent.

Bank of America Bloomberg Scarlett Food Danny Burger Middle East Ukraine Africa AI IPO Bloomberg Deals Bloomberg Invest Every Wednesday PRIVATE

– AI cloud capacity is a primary focus for investors.

– Renewed interest in drone companies due to geopolitical conflicts.

– The IPO market is a key indicator of M&A activity.

– Africa presents both growth potential and challenges.

M&A activityprivate market investmentgeopolitical riskemerging technology

▸ Full transcript

What would you like the power to do? Bank of America. This is Bloomberg Deals at Bloomberg Invest. I want to talk about the broader deal in the M&A environment. This is a moment in time. We'll see how long we're here. It's far too early to call. There is an underinvestment in what's going on in private markets because everyone's looking for additional AI cloud capacity and it's very tough to build. Everybody wants to get things going and the IPO market is just one symptom of that, as an early indicator of what we're going to see in the M&A market. Let's go to Scarlett Food, who's taking a closer look at drone companies. With ongoing conflicts in the Middle East and Ukraine, there's renewed investor appetite for new names in the space. Excellent reporting. I'm Danny Burger, and this is Bloomberg Deals. Every Wednesday at noon Eastern, only on Bloomberg Television. Africa. A region rife with potential for growth and opportunities, but not without its challenges. Join us as we get to the heart of African business, politics, and economics. And ask the question, what's next? On this episode, a border can be a risk for all of us. The solution is not to close borders. The solution is...

Analysis

The M&A environment is currently characterized by underinvestment in private markets, driven by a focus on AI cloud capacity, which complicates IPO activities. This situation suggests a potential shift in investor sentiment as they seek new opportunities, particularly in emerging sectors like drone technology amidst geopolitical tensions.

Smart money should note that the renewed interest in drone companies, spurred by conflicts in the Middle East and Ukraine, could signal a broader trend of reallocating capital towards innovative sectors. This pivot may indicate a strategic shift in investment priorities, highlighting the importance of agility in adapting to evolving market dynamics.

15:57
PDT

The Mariners are viewed as a compelling underdog story for the upcoming MLB season.

Seattle Mariners World Baseball Classic Jazz Chisholm Griffey Shashwally MLB AJ Favorite World Baseball Classic The Mariners

– There is a growing demand for authenticity and access in sports broadcasting.

– Engagement strategies targeting younger audiences could reshape MLB's market presence.

– The World Baseball Classic is generating excitement and emotional moments among fans.

– The potential for a lockout could impact MLB's business operations and fan engagement.

▸ Full transcript

First thing that pops to your mind will bounce it back and forth. You're gonna be really good at this. All right. All right. Favorite baseball player of all time? All time. Griffey. Favorite softball player of all time? Shashwally. Favorite World Baseball Classic 2026 game or moment? Probably my moment was celebrating with the Venezuelans when they beat Italy. Ha ha ha. Most exciting M-O-V player? Hmm. I love watching Jazz. Jazz doesn't play. Storyline you're most looking forward to in the 26 MLB season? What the Mariners are gonna do after last year? What team do you want to see win a championship? The Mariners. Ooh, the Mariners. I really wanted them to win last year. I did, y'all. Wow. I just think it would be... Explain this to me. You're a Tampa girl. I know, I know. And you love my former team. What is that about? I know. You know, it's not, I just think it would have been really cool to watch them win. Yeah. I'm a big underdog person. And finally, what's your dream hosting gig? Hmm. That's fun. Probably get all the greats in every sport ever. And we just have one big show of who's the best. Wow. It's like an all-fours Olympics. Whoa. When do we show up? Right? You too. All right, I'll be there on the sidelines documenting it. AJ, this is...

Analysis

The conversation highlights a strong emotional connection to baseball, particularly the underdog narrative surrounding the Seattle Mariners, which could resonate with fans and investors alike. The desire for more authentic engagement in baseball, including behind-the-scenes access, suggests a potential shift in how the sport could attract a younger audience and increase viewership.

15:54
PDT

Players should be showcased beyond their athletic skills.

Hunter Green Willi Adamus Shohei Ohtani Aaron Judge Major League Baseball Dominican Republic DXY

– Authenticity and personal stories can enhance fan engagement.

– Increased access to players could unlock media opportunities.

– The potential for a lockout may impact MLB assets.

– Younger audiences are drawn to more expressive player interactions.

sports marketingfan engagementmedia opportunities

▸ Full transcript

Let's see these players behind the helmet. What is it they love to do? A lot of them are so good at other things than baseball. Hunter Green is a great artist. Willi Adamus loves architecture. Like being able to tell those stories beyond just who they are as players. Let's see that. Let's understand that. But then also allow them, once you see who they are, allow them to be who they are when they get on the field. And so I don't know, I'm a big, big bat flip fan. I'm a big go around the bases loud as you can. The way in which they were showing off the Dominican Republic jersey, let them do it with their raised jersey or Yankees jersey or whatever. That's to me, I feel like that's the next move. I feel like kids love it. More bat flips. More everything. Just be authentic. I mean, I think forever baseball was America's pastime and it was number one above football and basketball. I'm dating myself a little bit back in the 70s and 80s. But I do think they need to just let it rip, more access in the clubhouse. Everything magical happens before the first pitch, but yet we locked that down. And I think it's a great multimedia, multi-billion dollar media property. If we unlock that and allow people to see, how does Otani prepare? How does Judge prepare? Adamus, what's he doing? I think it's a great opportunity for baseball. More is more. Do you think there's gonna be a lockout? It sounds like it. Yeah. It sounds like it. But you know what's great about that? I mean, it's not great, but you know what? Please tell me. Come here. What you can do, it's.

Analysis

The discussion emphasizes the need for Major League Baseball to showcase players' personalities and interests beyond the game, suggesting that more authentic expressions, like bat flips and personal stories, could engage younger fans. This approach could unlock significant media opportunities and enhance the sport's appeal, especially as it seeks to grow its audience in a competitive entertainment landscape.

Smart money should note that the call for increased player visibility and authenticity aligns with broader trends in sports marketing, where fan engagement is driven by personal connections to athletes. The potential for a lockout could create volatility in MLB-related assets, making it crucial to monitor developments closely.

15:52
PDT

MLB is in a growth phase, targeting younger audiences.

Major League Baseball Playball Bloomberg MLB New York Bloomberg Power Players New Playball Saturday PRIVATE

– The 'Playball' show focuses on player stories and instruction.

– Storytelling is key to enhancing fan engagement.

– Engaging narratives can attract new fans to baseball.

– Player experiences are highlighted to build relatability.

youth engagementsports marketingstorytelling

▸ Full transcript

to New York, powered by Bloomberg's award-winning journalists. Front row conversations with the voices shaping the future of sports and business, where game changers connect from the boardroom to the locker room, a place for bold ideas, powerful insights, and high-impact conversations. Every sport grounded in Bloomberg insight. Join us, Bloomberg Power Players New York, September 10th, 2026. So let's talk about Major League Baseball a little bit. You've got a show in the MLB network, Playball Saturday mornings. Yeah, Playball. So this is fascinating to me because it's coming at this moment, as Alex said earlier, where baseball is in growth mode, maybe for the first time in a while, like really sort of feeling like, all right, we're going to bring new people in. Help us understand sort of the business case for the show and sort of how it came about and what you're excited about. Sure. So I've been hosting Playball for the last four years. It's very much tailored towards kids. But it is a highlight show that just kind of showcased what happens the week prior within baseball. And then it's a lot of giving instruction or you'll have a lot of players talk about their favorite moments, their big moments, what it is that they did when they were younger, big inspiration. And then also kind of breaking down a lot of different plays or maybe it was a really good, a good play that happened or a great hit. A lot of times we'll have you do demos. So I'll demonstrate whether it is a slide, a Turner slide, or if it was a...

Analysis

Major League Baseball is experiencing a growth phase, with initiatives like the 'Playball' show aimed at engaging younger audiences. The focus on storytelling and player experiences is crucial for attracting new fans and enhancing the sport's appeal.

The emphasis on relatable narratives and player backgrounds can significantly enhance fan engagement, mirroring successful strategies seen in other sports. This approach not only builds a connection with younger demographics but also positions baseball for sustained growth in a competitive entertainment landscape.

15:47
PDT

Empathy in sports broadcasting enhances audience connection.

AJ Jessica Mendoza LSU Texas Tech OU Brie Ellis Kim Ng AUSL WNBA MUBA TV

– Former athletes can provide unique insights into the challenges of the game.

– Storytelling is becoming a key component in sports media.

– Understanding athlete experiences can improve commentary quality.

– The demand for relatable sports narratives is growing.

▸ Full transcript

So I think if you being able to have the knowledge or the experience as an athlete, even if it's a different sport, everybody knows that drive and the competitiveness it takes to get from point A to point B. And I think being able to relate in that fashion allows conversations to flow in a different way or for you to explain things that maybe might be a little bit different. I'm curious if you feel the same way. I do. I do. And I think one of the things that I really was really careful in my early days with broadcasting was as a former athlete, you can talk about the audience a little bit. And I always thought my audience were my two daughters, right? When they were in third and fifth grade, really kind of unpack it, where it's really digestible. But also I think practicing empathy and compassion. Because they say the further you get away from your playing days and the further you get away from the field, the easier it is for you. And you can't forget how hard the game is. Because it is really, really difficult. I think explaining that and giving it its due justice is equally as important as trying to make it sound like everything should be done or should have been done better. Exactly. That's how I feel in regards to saying yes, I understand that this is what should have happened. To me, it's kind of being like listen. They know that, yeah. There's nobody beating them up right now more than they are in their own mind as that athlete. And so what they're going to do or what they should do, the adjustment they're probably looking to make is. Yeah, and I think to your point, that empathy I love age of what you said about sometimes on TV when you slow it down 500 times and with.

Analysis

The discussion highlights the importance of empathy and understanding in sports broadcasting, emphasizing the shared experiences of athletes across different sports. This approach not only enhances audience engagement but also fosters a deeper connection with the challenges athletes face, which can be a valuable perspective for sports analysts and commentators.

Smart money should note that as broadcasting evolves, the ability to relate to audiences through personal experiences and storytelling will become increasingly critical. This trend may influence the demand for former athletes in media roles, potentially impacting the valuation of sports media companies and their talent acquisition strategies.

15:45
PDT

Mentorship can pivot career paths significantly.

Jessica Mendoza AJ LSU SEC YouTube ESPN US TV My Way Jenny Finch Sunday Night Baseball

– Athletes are becoming more involved in media and storytelling.

– The sports media landscape is evolving with new narratives.

– There is potential for growth in sports-related media investments.

– Personal branding is becoming crucial for athletes.

sports media evolutionathlete branding

▸ Full transcript

We're putting that out into the world. There's a really cool moment, and I want you to share this story with our audience, where you, obviously you're interested in business, you're interested in the business of sports, you've got your mindset on being a sports agent, and Jessica Mendoza says, hmm, what about this other path? Can you tell us that story? Yeah, so it was my senior year in college, and I had been asked a lot to do a lot of interviews, and so Jessica Mendoza was one of the individuals that would often interview me. And I remember it was after we had the SEC tournament was at LSU in my senior year. And so she just asked me after one of the interviews have I ever thought about being on camera? And at that point I was actually already on camera, had a show called My Way with AJ at LSU, which is a YouTube show. I just competed against the different LSU athletes. So I told her, I was like, yeah, I'd love to. I just never envisioned a career in it. And so after she said that to me though, I really just started thinking a little bit more of it. And I said, okay, yeah, that's actually something I would like to do. And so I went back to school and got my master's degree in MassCom in broadcast realism. That's incredible. My story with Jessica, I know her, Jace, I haven't told you this. We've known each other since basically teenagers because the first time I started falling in love with softball that I had real exposure was that Jenny Finch, Jessica Mendoza, US Olympic team. And we did a little TV thing at the All-Star game. And we've been friends ever since. And of course we work together at ESPN on Sunday Night Baseball.

Analysis

Jessica Mendoza's suggestion to consider a career on camera significantly influenced the speaker's trajectory, leading them to pursue a master's degree in broadcast journalism. This highlights the importance of mentorship and guidance in shaping career paths, particularly in sports media.

The conversation underscores the growing intersection of sports and media, where athletes are increasingly leveraging their platforms for storytelling and personal branding. This trend suggests potential investment opportunities in sports media and related sectors as they evolve to accommodate new narratives and personalities.

15:43
PDT

WBC enhances player visibility and relatability.

AJ Andrews Major League Baseball World Baseball Classic Texas Tech OU Nigerie Kennedy AUSL NFL AJ WBC Gold Glover Edgar Martinez GC=F

– Storytelling is key to fan engagement.

– Softball is gaining traction with new league structures.

– Younger audiences are crucial for future growth.

– Individual player narratives can drive team loyalty.

sports marketingfan engagementwomen's sports growth

▸ Full transcript

To get to know NFL players certainly. Baseball players are, you know, kind of hidden from us. And softball players, I think, the same way. I don't know if it's the nature of the game or what it is. Well, I like what you said, AJ. I think what WBC brings out, it takes the helmet off the player. Yeah. And it unveils the person of who and the why and where you come from. And the way you fall in love with players, both men and women, is knowing their backstory. Yeah. Where they come from. Is there a relatability connect point? Like we're both from Florida. Yeah. Gold Glover. Okay, now we can connect on that, right? And I think WBC does it in such a beautiful way that I'm left starved for more, and I want to see more players being themselves, being unapologetic if they want to wear pink, orange, green, wear whatever the hell you want. Yeah, just play good. You know, Edgar Martinez, my great teammate, Hall of Famer for the Seattle Mariners, used to tell me, 'Alex, you feel good, you look good, you play good,' and I think the same is true for all sports. Yeah, no, I agree. I think definitely to your point, the storytelling would be a great piece, especially I feel like what's hot are the girls that come right out of college. Yeah, right? So being able to tell more of those stories allows people to really follow them into their teams because then, of course, you're fans of them, but then you become fans of their teammates and the team. Like to me right now, Nigerie Kennedy, who's a pitcher at Texas Tech who knocked off the dynasty of OU last year, right? And so, and she's the one that has the first million with Mahomes at Texas Tech. And so being able to follow her, right? Talk to her.

Analysis

The discussion highlights the importance of storytelling in sports, particularly how the World Baseball Classic (WBC) allows players to showcase their personal backgrounds and connect with fans. This connection is crucial for building a fanbase that transcends individual players and fosters loyalty to teams.

Smart money should note that the emphasis on personal narratives and player individuality could drive engagement and viewership in baseball and softball, particularly among younger audiences. As leagues like the AUSL expand and gain visibility, the potential for growth in women's sports, especially softball, is significant.

15:41
PDT

Softball's popularity is on the rise, with the AUSL expanding from four to six teams.

Kim Ng AUSL Brie Ellis Barry Bonds WNBA MUBA

– The focus on storytelling and representation of female athletes is key to growth.

– Brie Ellis is being compared to Barry Bonds, highlighting the potential for star power in softball.

– The league's structure is shifting towards more stability with permanent team locations.

– Learning from the WNBA's success can provide valuable insights for softball's future.

women's sports growthstorytelling in sportsfemale empowerment

▸ Full transcript

There's a lot of faster pace. The depth is different. You have to have quicker reactions. There are slappers. It's much easier when I was running around. There's just a lot of fun within the game of softball. Now you're speaking his language. You know what I mean? There's just a lot to softball that you don't necessarily get in baseball. Because of that, you're going to love both. So give it a shot. And I feel like at that time, such as my senior year, it's when it started to explode, and now it's just a supernova. You've seen what happened in WNBA. What do you think softball can do to learn from that? The future of softball with these numbers we just talked about. Yeah, I think it's only going to continue to get bigger. I mean, Kim Ng is now the commissioner for the AUSL, and so that's the limited softball league. Last year there were four teams; now there are six, so it is continuing to grow. And now they actually have cities; before it was kind of a barnyard system where you would move and play them in different cities, but now they have homes in each of the six cities. And so I think that within what I've seen from basketball, MUBA, a lot of it's the storytelling and giving these women the opportunity to be a thousand percent who they are. I love it when you can see women in these positions of being extremely powerful or dominant. Talking about her as if she's completely taking over the way in which she is. And I want those storylines to be built the same way within softball. This past year, Brie Ellis is someone that comes to mind. They were comparing her a lot to Barry Bonds. And so it being the conversation of, okay, we'll build upon that, but hopefully making it her own, not necessarily like she's the female Barry Bonds.

Analysis

Softball is experiencing significant growth, with the establishment of permanent teams in the AUSL and a rising profile similar to that of the WNBA. The emphasis on storytelling and showcasing powerful female athletes is crucial for the sport's expansion and appeal to a broader audience.

Smart money should note that the success of women's sports, particularly in softball, hinges on effective branding and narrative development. As the league grows, the potential for increased viewership and sponsorship opportunities will likely follow, mirroring trends seen in other women's sports leagues.

15:36
PDT

WBC holds greater significance for players from certain countries than the World Series.

Derek Jeter Poppy Kevin Burkhardt Dominican Republic Venezuela Olympics PGIN WBC With Derek Jeter World Series Did Pythagoras Keep Oscaring

– Players feel a strong emotional connection to their national representation.

– The event could enhance player branding and marketability.

– Engagement with younger demographics is crucial for baseball's growth.

– The pride associated with national representation parallels Olympic sentiments.

sports marketingnational pridefan engagement

▸ Full transcript

With Derek Jeter, Poppy, myself, and Kevin Burkhardt. Poppy and I sit in the middle, and we were trying to explain to our corner men that for countries like the Dominican Republic or Venezuela, this is bigger than a World Series. They had a hard time really understanding that. I agree. I mean, the players say it. This isn't an opinion; this is genuinely how they feel. It's because it's an opportunity where it's just a different feeling when you can play with individuals that come from where you come from, have experienced the same hardships you've experienced, and look like you. They understand to the fullest what it took for you to get here. The pride of being able to represent your country is immense. There are so many people at home who would not kill to be in Miami to watch these games. I mean, I feel like you can relate it to the Olympics if you want to. The pride people have for competing for their country in that sense is the same thing with the WBC. And so I feel like it's fairly simple to understand why it would be a little bit more impactful to some people than a World Series. Question, Patricia. Did Pythagoras have a theory on any other shapes? Patricia, what's more valuable, the art or the name on it? Interesting. But is the portfolio income resilient to rate changes? At PGIN, we're a global asset manager who believes the market rewards those who challenge it. PGIN. Keep Oscaring.

Analysis

The discussion highlighted the emotional significance of the World Baseball Classic (WBC) for players from countries like the Dominican Republic and Venezuela, emphasizing that it often surpasses the importance of the World Series. This sentiment reflects a deep-rooted pride and connection to national identity that resonates strongly with players and fans alike.

Smart money should note that the WBC's impact on player branding and marketability could lead to increased engagement and revenue opportunities in baseball, particularly as it appeals to younger demographics. The emotional connection to national representation may drive viewership and participation, enhancing the sport's growth trajectory.

15:34
PDT

Baseball's appeal is growing among younger fans.

Major League Baseball World Baseball Classic Venezuela Dominican Republic United States WBC US

– Players are increasingly expressing individuality through appearance.

– The World Baseball Classic highlighted strong fan engagement.

– Representation in sports is crucial for fan connection.

– Brands may find new opportunities in baseball's evolving culture.

fan engagementcultural representation

▸ Full transcript

On the field, I see it growing if we can continue in that trajectory. Also, players are now able to wear their swag, the cleats. I don't know how you feel, but you can now have a beard as a Yankee, things like that. Just different things that we didn't really see in the past. I think moving, especially in tailoring more toward a younger generation, is where baseball probably needs to go to continue to watch. I mean, beards didn't apply to me because I'm still trying to grow one. Hey, listen, you look good, but not everybody can pull it off, right? Beards are makeup for some men. So just on the WBC for a second, I mean, you were in the fan zone. You were doing some broadcasting from there, but this is about the fans at the end of the day. What was the fan vibe and what did you hear from them? Well, I don't know if you guys know, but I have been adopted by the Venezuelans. Wow. They love me over there. It was so fun. I'm huge in Venezuela. I gotta go. I just tried the Arepa, so I understand the Arepa power now. Like I'm in it. I'm in it. Different than the actual Arepa. I'm in there. But I feel like within the fans, they just want to be represented. Because I was out there, whether it be the US fans, Venezuela, Dominican Republic, it didn't matter. The pride within being able to see people that come from where you come from, selling on such a high stage in a sport that means so much.

Analysis

Baseball is experiencing a resurgence, particularly among younger fans, as players embrace personal expression through their appearance and style. The World Baseball Classic showcased a vibrant fan culture, highlighting the importance of representation and national pride in the sport's growth.

Smart money should note that the shift towards a more inclusive and expressive environment in baseball could drive increased engagement and viewership, particularly among younger demographics. This trend may present opportunities for brands and sponsors looking to connect with a diverse audience passionate about the sport.

15:32
PDT

Avoiding a work stoppage is crucial for MLB's growth.

Major League Baseball AJ Andrews LSU World Baseball Classic Florida Miami AJ GC=F

– Recent momentum in baseball presents opportunities for expansion.

– The World Baseball Classic showcased strong fan engagement.

– Diverse fan bases can enhance market reach.

– Maintaining excitement in baseball can drive revenue.

▸ Full transcript

A lot of questions for. Yeah, Jayce, everyone I respect, I want to ask two questions. Number one, how do we avoid a Major League Baseball work stoppage after the 2026 season? And the second one is how do we build on this great momentum that Major League Baseball has built over the last six months? And she has built quite a career for herself and has, I think, a lot of opinions about what should happen next. Coming up in the deal, AJ Andrews. All right, AJ Andrews, welcome to the deal. We're so excited to have you with us. Lots to talk about across your career. We're going to talk a little LSU, a little softball, but I think we got to start with baseball. Why not? Yeah, so AJ, first of all, I love what you're doing. I'm a big fan of your work. I'm an admirer from afar. Ditto. Thank you, and we have a lot in common. You know, we're both from Florida. You tell me Miami. We're both former gold-glove winners. Okay. Love that. Thanks for the one in there. We're in the world of baseball and covering media. But you and I happen to be at the World Baseball Classic down in Miami. And it seems to me, and Jason, we've talked a lot about this, that baseball could be at an all-time high or it's going through a great moment. How do you keep baseball going and how do you see the world of business and baseball right now? I feel, I don't know how you felt at the World Baseball Classic, but it was one of the most electric environments I had ever been able to experience within baseball and being able to connect with so many different fan bases and watch the games. It felt like.

Analysis

Major League Baseball is experiencing a significant moment, with discussions focused on avoiding a work stoppage after the 2026 season and building on recent momentum. The electric atmosphere at the World Baseball Classic highlighted the potential for continued growth and engagement within the sport.

Smart money should note the importance of maintaining this momentum in baseball, as it could lead to increased revenues and fan engagement. The connection between diverse fan bases at events like the World Baseball Classic suggests opportunities for expanding market reach and partnerships.

15:29
PDT

BHP's CEO Mike Henry stresses the importance of strategic clarity during transactions.

BHP Mike Henry Francine Lacroix Bloomberg FOMO NASA Bloomberg Television Bloomberg Surveillance Ed Ludlow Kennedy Space Center PRIVATE

– Leadership transitions should be planned well in advance.

– Emotional intelligence is key in corporate decision-making.

– Understanding market signals is essential for investment success.

– Lessons from high-level executives can inform broader market strategies.

leadership transitionsstrategic decision-makingemotional intelligencemarket signals

▸ Full transcript

We see the era of billionaire athletes. While others follow the noise, we follow the money. Don't do it because of FOMO. We'll also learn lessons which we can apply to our work and daily lives. Tune in to the podcast version of Leaders with Francine Lacroix. Listen and watch on Bloomberg Television or wherever you get your podcasts. Next week on Leaders with me, Francine Lacroix. I speak to the outgoing chief executive of BHP, Mike Henry, about his do's and don'ts for making deals. You don't want to be setting strategy in the middle of a transaction. Changes he made at BHP. We needed to make sure that we had a portfolio that was fit for the future. And how to ensure smooth leadership transitions. Day one, succession starts now. So tune into the podcast version of Leaders with Francine Lacroix. Listen and watch on Bloomberg Television or wherever you get your podcasts. Money isn't about drowning in emotions. It's about understanding what's actually happening. Markets are the best way to glean signal from noise and that is what we try to do every morning. This is Bloomberg Surveillance. We'll be bringing you up to the minute space news whenever and wherever it happens. I'm Ed Ludlow at NASA's Kennedy Space Center in Florida and this is Bloomberg. I feel just to build upon what baseballs are.

Analysis

The discussion highlights the importance of strategic leadership and decision-making in the context of corporate transactions, emphasizing that effective deal-making requires a clear vision and preparation. Insights from BHP's outgoing CEO, Mike Henry, suggest that successful leadership transitions and a future-fit portfolio are critical for sustaining business growth.

Smart money should note that the emphasis on emotional intelligence and strategic foresight in leadership can differentiate successful companies in volatile markets. The focus on understanding market signals rather than succumbing to emotional noise is a crucial takeaway for investors navigating complex financial landscapes.

15:25
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Private equity can evolve from a transactional to a relational model.

Steve Grit Young NFL

– Fostering abundance in business relationships may lead to greater financial success.

– Legacy-building is becoming a key focus for successful firms.

– The mindset shift from zero-sum to collaborative growth is crucial.

– Daily commitment to aspirational goals is necessary for success.

private equity evolutionbusiness relationshipslegacy building

▸ Full transcript

The focus is on the transition. Think about transactions, think about the roots of private equity; we're going to make a deal, right? If the deal sits as a spreadsheet in front of you, there is a way to take that as a base of transaction and create a space where we start to look at the full measure of what you'd like to do and the full measure of what we, the restrictions and the abundance of what we can do, and let's see if we can find ways together. It's aspirational; you have to do it every day. You have to talk about it every day, you have to believe it every day, you have to go into the relationship that way. When things get tough, you have to remind yourself that that's what it is. I've taken from my previous life and said private equity can be a place of abundance that makes no sense because it should be just a transaction; it should be a zero-sum game. You get what you get, I get what I get, but great businesses, the greatest businesses, are the ones that have that heart, that feeling that there might be other ways to make some money. That's fine with you, but to me, that's the way to make money and make it legacy. As we wrap up, Steve, I did want to ask you, and this is very much a piece with what we're talking about. Your dad, who I think just recently turned 90, Grit Young, one line that you've talked about many times that I never forget is you told him you wanted to play in the NFL and he said, that's the dream. That's a wonderful dream, son. Lest the.

Analysis

The discussion emphasizes the potential for private equity to transcend traditional transactional frameworks by fostering relationships that focus on abundance rather than scarcity. This approach suggests that successful businesses can create legacy through collaborative growth, which is often overlooked in a zero-sum mindset.

Smart money should note that the shift towards a more relational and aspirational model in private equity could lead to innovative investment opportunities. By prioritizing partnerships and shared success, firms may unlock new revenue streams and enhance long-term value creation.

15:23
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Bill Walsh emphasized love and partnership in leadership.

Bill Walsh Mike Holmgren Mike Shanahan Green Bay Denver Broncos EQ Super Bowls

– He created a repository of knowledge for future coaches.

– Emotional intelligence is crucial for team dynamics.

– Sharing proprietary knowledge can ensure competitive advantages.

– Resilience and adaptability are key traits for success.

leadershipemotional intelligenceknowledge sharing

▸ Full transcript

Mind, great connector, EQ, what was his greatness? All of that. But I'm going to give you, I joined the team, first meeting he's talking about love and everything. Someone's over in the corner with a big camera, filming it. And walking around, following him down the hall, out to the practice field. And I'm like, what is this? Are they doing a museum? Or what is this? Because he's already won Super Bowls. He's like, maybe there's, I don't know, a documentary. And no, he was, it took me some time to figure it out. But he was developing what was a repository, like a physical box of everything that he was to all the EQ, all the speeches, all the installation, all the offense, all this, you know, anything that he'd ever done. I want it to be in a place where I could hand it to my assistant coaches because my assistant coaches aren't getting head coaching jobs and I want them to thrive. And so he handed it to Mike Holmgren as he went to Green Bay. Wow. He handed it to Mike Shanahan as he went to the Denver Broncos and he handed it to many others. And he's basically saying at the height of his career, here's everything that I am. Here's all my proprietary knowledge which is two generations, three generations ahead of everybody. We had a tactical advantage for 20 years, right? And he's handing it out. And both those guys told me that as he left, as they were leaving with this box of stuff, he said to them, I'll see you in the championship game. And we did. And then sometimes they beat us. Like what are we doing? He goes, Steve.

Analysis

Bill Walsh's approach to leadership emphasized love and partnership, creating a culture of empowerment among players and coaches. His legacy includes a repository of knowledge that he shared with successors, ensuring a tactical advantage that lasted for decades.

Smart money should note the importance of emotional intelligence (EQ) in leadership and team dynamics, as it fosters resilience and adaptability in high-pressure environments. The willingness to share proprietary knowledge can create long-term competitive advantages, a strategy that could be applied across various industries.

15:21
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Eddie DeBardelo viewed players as partners, not just assets.

Eddie DeBardelo Bill Walsh Eddie De Pro Football Hall

– Accountability was a key aspect of DeBardelo's management style.

– Bill Walsh's leadership further reinforced a culture of empowerment.

– Shared goals between owners and players can enhance team performance.

– The principles of partnership and accountability are applicable in business.

leadershipteam dynamicsbusiness empowerment

▸ Full transcript

Both had big impacts in my life and my business life. Talk a little bit about DeBardelo and also Bill Walsh. What did they mean to you and what made them so good? Eddie DeBardelo is in the Pro Football Hall of Fame as an owner. He's in there for a lot of reasons, but to me the main reason is he was the first equity owner of a professional football team for sure that looked at the players as partners. Everything else, all I'd ever known was, and I'm gonna conflate it, but it was chattel. And so I think he saw us like you're my partner and we're in this together. And I think that's the empowerment, right? It's like I own the team and I could, it's in a drawer somewhere. I got a piece of paper that says I own it. Right. But I don't pull it, I put it in the drawer and I don't really pull it out. And you know what, don't make me pull it out because I want you to know that, and his question was always, I want you to be champions. What do you need? And so whatever it was, we'd list it and then when we know what he did, he held us accountable. Like I gave you everything you needed. Where is it? And if we came up short, it was like, we didn't get it done. And so we'd have a little, you know. There'd be a discussion. There'd be a discussion. But it was like, you talk about empowerment. I always felt like we were in it together. And that's a super powerful feeling from an owner. That's unusual. And then Bill only accentuated that. He was somebody that was worried in 1987, 1992.

Analysis

Eddie DeBardelo's approach to ownership in professional football emphasized partnership with players, fostering empowerment and accountability. This unique perspective, combined with Bill Walsh's leadership, created a culture of shared goals and mutual responsibility that is rare in sports management.

Smart money should note that the emphasis on partnership and accountability can translate into successful business practices beyond sports. The ability to foster a collaborative environment may lead to better performance outcomes and resilience in the face of challenges, a lesson applicable across various sectors.

15:14
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Failure is a common experience in both sports and business.

Steve Bill Walsh FIFA World Cup 2026 Bank of America Bloomberg OPS OPS

– Resilience and the ability to learn from mistakes are key to success.

– Self-awareness can enhance hireability and team dynamics.

– The mindset of athletes can translate effectively into business leadership.

– Understanding human behavior is crucial in both fields.

resilience in businessfailure as a learning tool

▸ Full transcript

And tell you what's your batting average, what are your RBIs, home runs? OPS. OPS, everything. So you're either going to get cheered or booed, and it's immediate. And I think one of the advantages Steve and I have being former athletes is we have no problem saying, 'Hey, that's my fault. That's my fault.' And we get our butts kicked over and over again. In baseball, if you fail 70% of the time, you go to the Hall of Fame. So you almost have a PhD in failing. The key is that you have a master in getting back up. And I think that's, we were talking a little bit about that earlier. A lot of people in business that all they've done is win, win, win. We're actually perfectly made for business because business is a sport of failure. Well, yeah, I love that because in the way, if I could get all the guys that are out there going through that and learn, it's intuitive, right? It's what the, you can't get into the pros and not have that happen to you. And if you could just be aware, self-aware as what's, it's intuitive, but you're not necessarily aware of it. And if you can become aware of it and watch it and become as a talent, you can be easily hireable. Like if you really take it in and you notice it and you pay attention to it, it's again, it's portable, 100% portable over into the, you know, another practice, another, because it's people. All right, so I want to introduce an on-the-fly segment that I'm going to call 'asking for a friend' because I really am asking for a friend. And this isn't so like, I'm actually asking for a friend. Steve asking for a friend.

Analysis

Former athletes emphasize the importance of resilience in business, highlighting that failure is a common experience that can lead to success. They argue that the ability to acknowledge mistakes and learn from them is crucial in a business environment that often mirrors the competitive nature of sports.

Smart money should recognize that the mindset cultivated through sports—particularly the acceptance of failure and the drive to improve—can be a significant asset in business. This perspective may lead to more effective leadership and team dynamics, as individuals who understand failure are often better equipped to navigate challenges.

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